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Beyond the volatility: is a near-term recession likely?

August has been a highly volatile period for the financial markets. Reignited trade tensions and recent yield-curve inversions have spooked investors, culminating in a 3% drop in the S&P 500 Index on Aug. 14, its worst day of the year. Ivy provides its perspective on these two market moving events.

Ivy Live/ 8.22.19

FAANG: In the government's crosshairs

The big four tech giants – Apple, Amazon, Facebook and Google – are facing antitrust investigations and scrutiny over data privacy. And surprisingly, the push is gaining bipartisan support. Is it just noise for the tech sector or a larger threat to investors?

Market Perspective/ 8.05.19

Fed cuts rates; where do we go from here?

The Fed announced a much-anticipated one-quarter-percentage-point cut to the federal funds rate. Following the decision, Fed Chairman Powell's press conference commentary was perceived as unexpectedly hawkish. While the market had a 'buy the rumor, sell the news’ reaction, but we believe underlying fundamentals should support continued growth during the rest of 2019.

Maximizing the Value of 529 Plans

Parents are preparing their kids to head back to school as the topic of affording college tuition looms large. Discover how you can help your clients with 529 plans.

Genlink

Attracting assets in motion

Over the next few decades, client assets currently held by Traditionalists and Baby Boomers will be controlled by Generation Xers and Millennials, reshaping the traditional financial advisor model. Discover how you can plan for each generation.

Genlink

Why advisors need to understand each generation

Navigating generational differences can be tricky, whether you’re speaking to a younger client or chatting with a long-time client that might be your parents’ age. Knowing each generation can lead to a growing and stable practice.

Ivy Investments

We stand for a legacy of expertise, focused on delivering strong, long-term results. Our name reflects our progressive product offerings and growing global presence as we continue to adapt to the needs of investors.

Advisor Article

Five reasons Generation X needs you

04.16.19

As financial professionals, it’s easy to get swept away in the allure of Millennials or the even younger generation that follows them. It’s also easy to focus primarily on your Traditionalist and Boomer clients who likely make up most of your assets. However, there are five reasons why Gen X (born between 1965 and 1979) needs the guidance of financial professionals now more than ever. Let’s take a closer look.

1
Gen Xers are entering their prime earning years

Let’s recognize one thing at the outset: many Gen Xers already have climbed to the top of the corporate ladder – you just might not have noticed. They hold 51% of leadership roles globally and will continue to move into more senior positions.1 And considering Gen X makes up 33% of the workforce2, they are in a unique situation to take on more senior leadership roles – with potentially higher paychecks – as Baby Boomers vacate positions. Even though there are fewer Xers available to step into these positions, Millennials may not have the experience required for the role, giving Xers a powerful place at the salary bargaining table. They have the critical skills necessary to be successful. You’ll want to be there
to help them manage the money when it starts flowing in!

2 Gen Xers need help managing their debt

While Gen Xers are being promoted and making more money, their financial obligations make them prime for your services. The average Xer has debt of $125,000 (which includes mortgages, credit card debt, auto loans, student debt and personal loans), far higher than the national average of $88,313.3
To make things more complicated, a recent study finds nearly a quarter of Gen Xers believe they can’t save for retirement until they pay off their credit cards.4 These barriers can be addressed with the guidance of a financial professional.

3 Gen Xers have goals

Despite the amount of debt they are carrying, Generation X has goals of reaching financial freedom. Members of this generation are thinking about retirement. Seventy-three percent of them cite retirement planning as their top financial concern.5 And another 37% say they would like to “fully retire” someday, but don’t believe that goal is attainable.6 Of course, considering this generation has lived through not one but two significant recessions, their gloomy outlook makes sense. With your help, they can turn their financial goals into financial reality.

4 Gen Xers are balancing a lot

Generation X has a lot on their plates, not the least of which is caregiving. While more than 52% have children living at home7, many Xers are caught off guard when they are also expected to take care of aging parents. Financial planning and retirement decisions often get put on the back burner to take care of more immediate needs. You can help by coaching this busy generation on decisions such as purchasing the right type of life insurance, deciding whether to save for the kids’ college funds or retirement and evaluating if it is better to lease or buy a car. Your financial coaching is invaluable when it comes to juggling Generation X priorities.

5 Center stage is near

After years of feeling overshadowed by Baby Boomers and Millennials, Gen Xers are finally taking center stage. Not only are they poised to become top earners in the coming years, but they are also the only generation to have successfully recovered from the Great Recession.8 While many may assume Xers should be more secure in their future, 61% of Xers are overwhelmed by the thought of providing for themselves and their family in the long term.9 This pessimistic group does have a glimmer of hope, you. Sixty-seven percent of Xers believe working with an advisor can improve their financial peace of mind.10

What now?

Even though Gen Xers are facing unique financial challenges, they are amassing wealth. Gen Xers will experience the highest increase in the share of wealth, growing from under 14% of total net worth to 31% by 2030.11 What can you do to attract this challenging yet lucrative demographic?

First, give them peace of mind by preparing them for the unexpected. Seventy-seven percent of Xers stated having financial peace of mind is a top priority.12 When you meet with them, talk about worst-case and best-case scenarios, weigh the pros and cons to calm their fears.

Next, remember this generation wants their advisor to be a resource, not a salesperson or authority figure. Tone down the formality – instead of meeting at your office, meet at a place that is convenient for them. And whatever you do, don’t get defensive if they have performed an internet search for the best ways to meet financial goals or provide a list of last year’s top performing funds. Help them sift through the information and guide, don’t dictate options.

Soon you will find creating small wins will boost their financial confidence and they will feel more secure trusting you with their financial wealth.

11The future of wealth in the United States. Mapping trends in generational wealth. (2015). Deloitte.

12Focus on Generation X. (2017) T. Rowe Price.

This information was prepared in part by an unrelated independent third party, BridgeWorks, and is provided for informational purposes only. Ivy Distributors, Inc., believes the information has been obtained from sources considered to be reliable, but does not guarantee the accuracy of the information provided.

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Related Articles

As we start to experience the greatest wealth transfer in history, preventing assets from walking out the door will be a challenge for many financial advisors. Here are some tips to help you with intergenerational financial conversations to help ease the tension amid families.

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